LIFE Urges Americans to Think About Income Protection, Offers Tips for Obtaining Coverage

ARLINGTON, Va., May 1 /PRNewswire/ --The results of a new survey show the historic recession has left many Americans with less in savings and investments -- and as a consequence, they are more vulnerable to serious financial hardship in the event they were to become sick or hurt and couldn't work. According to the nonprofit LIFE Foundation, more than a quarter (27 percent) of working Americans say they would have trouble supporting themselves financially "immediately" following a disability that keeps them out of work, while nearly half (49%) would reach that point in a month or less. Three out of four (74 percent) would face financial trouble within six months.

The LIFE Foundation released the survey findings to support Disability Insurance Awareness Month, a national campaign targeting the estimated 90 million U.S. workers who lack disability income protection.

"The survey focuses attention on the serious risks facing American workers trying to cope in this difficult economy without disability insurance," said Marvin H. Feldman, CLU, ChFC, RFC, president and CEO of the LIFE Foundation. "Now more than ever, it's critical for Americans to insure their ability to earn an income."

The LIFE survey also found that while a majority of Americans (66 percent) feel less financially secure than they did one year ago, only 17 percent of workers worry about the financial threat of becoming disabled and being unable to work. Their greatest concerns were tied to the economy, such as not being able to keep up with bills (55 percent), losing money in investments and savings (34 percent) and being laid off (20 percent).

"Many working Americans are not as concerned about the risk of a disability as they should be. What they don't know is that they stand a one-in-three chance of becoming ill or hurt and being out of work at least 90 days at some point in their career," said Feldman. "Without disability insurance, most people would face devastating financial consequences if they were to suffer a disabling injury or illness."

Money Saving Tips for Obtaining or Maintaining Disability Coverage

To encourage Americans to get the disability protection they need, LIFE offers four ways to obtain or maintain disability insurance coverage that meets your needs and budget:

Look into Group Disability Insurance - One of the most cost-effective ways to obtain disability insurance is through your employer. Employer-provided group disability insurance is typically easier to qualify for because the underwriting is often more lenient than for individual policies. With most group plans, employees are offered the same premium as others in their general age bracket, regardless of their health status or actual age. If you have the option to enroll in a group plan, look to sign up for a short-term disability (STD), which generally replaces a percentage of your income for three months, and long-term disability (LTD), which typically pays 40% to 60% of your pre-tax base salary for a longer period of time. To find out what your employer offers, talk to your benefits manager at work.

Consider obtaining coverage through professional organizations or associations - If you don't have coverage options through work, look for alternate programs through organizations and associations which provide affordable disability assistance to qualifying individuals. Many professional associations offer members the opportunity to purchase insurance through a group plan. Other sources of coverage include the Veterans Administration pension (for veterans); civil service disability pay (for federal/state government workers); black lung program (for miners); state vocational rehabilitation programs or group union disability coverage.

Check to see if you can qualify for lower premiums on your individual disability insurance policy - One of the primary ways of getting coverage is to purchase an individual disability insurance policy on your own. If you have your own policy, you may be able to qualify for lower premiums if, for instance, you have quit smoking, lost a substantial amount of weight or have made significant improvements to your health. In addition, in some cases changing careers may mean lower premiums. For example, if you go from being a construction supervisor to owning the company, your rates may decrease. If you're thinking of a new career, especially in today's economy, check into savings that may exist on the same amount of coverage.

Modify your current coverage options on your individual policy - If you are wondering if your budget will allow you to hold onto your policy, talk to your insurance agent or company. One way to reduce your premiums is to lengthen the waiting period--the time you begin receiving the benefit after claiming disability--say, from 90 days to six months. If this is something you're considering, be sure that you would be able to provide for yourself and your family for that period of time until your benefits take effect.

The LIFE Survey was conducted by Kelton Research between April 2-7, 2009. The survey polled a nationally representative sample of 1,007 Americans, ages 18 and older, using an online questionnaire. The survey has a margin of error of +/- 3.1 percent.

About Disability Insurance Awareness Month

Disability Insurance Awareness Month (DIAM) was created to get American workers to think about the need to protect their greatest asset - their ability to earn an income. Held in May, DIAM is an industry-wide effort that is coordinated by the nonprofit LIFE Foundation. More information is available at www.lifehappens.org/diam.

About LIFE

The Life and Health Foundation for Education (LIFE) was founded in 1994 in response to the public's growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the importance role insurance professionals perform in helping families, businesses and individuals find the insurance products that best fit their needs. To learn more about these topics, please visit www.lifehappens.org.

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